Ex-factory prices for Chinese industrial products grew more slowly in April year on year, due to lower oil prices and the SARS outbreak, the National Bureau of Statistics said Tuesday.
Last month's rise of 3.6 per cent compared to 4.6 per cent year-on-year growth in March, the bureau said.
The purchase prices for raw materials, fuel and energy rose a year-on-year 5.9 per cent in April, which was 0.1 percentage points lower than the March growth, it said.
Qi Jingmei, a senior economist with the State Information Centre, said the price fluctuation was mainly a result of people going out to buy things less due to fears of the SARS virus.
"They are unwilling to leave their homes,'' she said.
In April, retail sales of consumer goods rose a year-on-year 7.7 per cent to 340.7 billion yuan (US$41 billion), according to earlier figures from the statistics bureau.
The growth slowed from 9.3 per cent in March and 9.2 per cent for the first three months of this year.
Decreased oil prices due to the end of the United States-led war on Iraq also led to the price fluctuation, Qi said.
In April, the price of oil rose a year-on-year 36.9 per cent. The growth was 14.9 percentage points lower than March.
Ex-factory prices of industrial products, as well as purchase prices of raw materials, fuel and energy are important indicators for the consumer price index, Chinese policy-makers' key inflation gauge.
During the first four months of this year, the index rose a year-on-year 0.6 per cent.
Zhang Liqun, a senior research fellow at the State Council's Development Research Centre, said price rises were good news for China's economic development because the falling prices seen last year threatened corporate earnings.
The price rises suggested that local and overseas demand was helping balance overall supply and demand.
The government's efforts to cut overproduction and increase the capacity for new products were effective, said Zhang.
With the aim of fighting falling prices, the central People's Bank of China said it would boost both the M2 broad money supply and the M1 narrower money supply by 16 per cent this year.
M2 was 19.2 per cent higher at the end of April compared to a year earlier and M1 was up 18 per cent.
The bank said China's consumer price index would rise by between 1 and 2 per cent this year.
